A successful business requires proper and adequate resources. There are many ways to get resources for the company, but getting them at a lower cost is essential for running a profitable business. When you can get products and services at a lower cost, you can save money on your company’s production. There are several methods for obtaining sources at a lower cost.

The sourcing agent is the most common method used by many businesses. They are the individuals who assist businesses in obtaining enough products and services from various parts of the world. They contribute to the current location’s adequate availability of goods and services. They can take the form of a single person or an entire business entity with several members and they primarily operate on a commission basis.

Role And Need of an Agent:

  • These agents assist in the management of business entities and act as a liaison between the company and its suppliers.
  • They become involved in the business or company by entering certain agreements with general terms and conditions. They typically work on a commission basis, and they clearly stated their commission percentage in the agreement before joining the company.
  • The agents conduct extensive research and surveys on the availability of products and resources to assist businesses in selecting the best one.
  • They primarily negotiate with suppliers on behalf of companies to get goods and services at a low cost.
  • The source agents assist companies in locating the most reliable suppliers available in the market at a lower cost.
  • They aid in bridging the gap between the company and the supplier in terms of language, culture, communication, and other factors. They aid in making the communication process easier and more comfortable for businesses.
  • The agent’s aid in reducing the overall possibility of losses that may occur because of a financial crisis in a company.
  • They assist and guide businesses in obtaining sufficient and high-quality goods and services at a low cost within a limited time frame.
  • They have recently used digital supply chain management to make work much easier, faster, and more comfortable.

Because not all agents are equal and they differ in terms of general skills and knowledge. Hence, businesses must exercise caution when selecting the most versatile and highly talented agents to reap the greatest benefits.

Factors Required in the Selection Process:

The following are some general factors to consider when selecting a sourcing agent for your company:

  • Excellent communication
  • Transparency
  • Specialization
  • Home and away teams
  • Experience and more

The agents provide three types of fee structures: commission, hourly rate, and flat fee. The commission is primarily determined by the frequency of orders and the amount purchased. The percentage value of commission may range from 5 to 10%. The hourly rate approach is cost-effective and helpful for small businesses because they primarily based it on the number of hours worked.

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